Facebook Stock – Facebook Get it at 50% off like the pro’s do.
Facebook stock or as professional traders look at it Fadebook. How to get Facebook stock at 50% off.
First of all, this past month I have been asked by numerous traders, investors, and Facebook users if I am going to buy Facebook Stock FB and and what price am I looking for it to go to. My answer has been typically – 50% off the IPO price. Now please consider what we are buying. Facebook, is a huge internet presence with many, many, many users. Problem is that even with all these users, they have no real income. Any one in the industry knows, unless your selling a diet pill or a self help class, advertising is pretty much a dud on Facebook.
Facebook stock will more than likely be shorted by the professional traders.
Investors, (people who have to keep working to keep investing) on the other hand were not looking at the income side of the equation but on the popularity side of the equation. Sort of like the other 50% off stocks like Linkedin LNKD, Groupon GRPN and Pandora P . Just because everyone is using it, doesn’t mean that it will have income, remember Myspace? Yes these are all different stocks and there are many factors unforseen that effect stock prices and price action, but if we could suspend exact and enter in to the land of about, I will show you on a few charts what could possibly happen to Facebook stock and see how professional traders could see waiting until “price settles” to buy in.
Linked in is showing a pretty nice move down from the IPO open. There are many different considerations for buying stocks and timing the price action in the market. The point of this is that by waiting until the stock finds it’s bottom you can see an interesting drop off in price sometimes with in a few weeks to a couple of months.
Linkedin dropped from a high from the IPO’s second day of 107 to a low around 60.
Not all IPO’s will act this way and in no way should this be considered advice.
Linkedins symbol is LNKD
and remember, I am not giving advice about
Facebook stock.
Groupon’s IPO had a high of around $29 and then had a swing low of around $15. a few weeks later.
Most professional traders if they are going to more than day trade the price action the IPO’s (mostly short side) will wait for the swing low to occur before buying into their first positions.
When they see they have direction this is when they add on.
Most investors on the other hand look at the popularity of the company and or product (if they have one) and say ” I really love this company”, or “Everyone is buying it” . I of course love hearing these types of things because it creates for professional traders a great shorting opportunity.
Remember you can tell a lot about a corporation just by looking at its revenues or Earnings and check to the value at the IPO. Numbers over 20 are considered high by some. Then again professional’s like JPM said 104 to 1 is OK for Facebook stock.
Pandora was also another classic IPO where the stock’s high from the IPO was around $20 and three months later put in a swing low at $9.50. Again the popularity of this company was quite good and the pundits (sometimes known as Hacks) were touting this as the informed investor’s buy. As entertaining as that was to many professional traders, again the stock saw the short side action as traders could see the sentiment about the stock was more than fundamentals and the stock got a 50% reduction in price from the IPO.
The main point about Facebook stock and IPO’s in general:
1, Stock value and Popularity are very short term correlated.
2. If the press is pumping it up, the professionals will probably be selling it to you.
3. Professional traders rely on the investor’s ignorance of fundamentals and technical trading.
4. Professionals will be buying it from investors after they have lost about 50% off their initial purchase. (kind of like the S&P500 and pension funds)
5. Professional traders are patient and don’t have to buy. There is no rush because there is always another trade.
So, to ask if I am buying Facebook, the answer is no. I could be selling. What is the price or value of Facebook stock? I don’t know, I will keep shorting until it hit’s support, taking profit where I can. Do you like Facebook? Yes, but that does not ever influence my trading.
Adding Snap here this chart shows a dangerous possibility.
Could you see this stock down to $14. Watch out below. Too bad all those initial buyers have to hold 6 months and institutions have 12 months to wait. Could be bad. With their market share can they be worth more than Snow? or Target?
Trade what you see and never listen to the so called experts. If you can’t see the direction of the market and don’t understand how to use a stop, then don’t trade. Never take stock tips, and if it is on the TV as a hot pick, it is too late. Like in facebook stock.
Day trading course focusing on the S&P500 emini futures support and resistance and efficient market hypothesis which states that stock market prices are essentially unpredictable. Be responsible for your trades, do your own work and never rely on others. When searching for a Day trading course or facebook stock, be sure you understand the risks involved in trading facebook stock.
Day trading course looks at price and direction, the support and resistance and the direction of the market.
Day trading course will be in your area soon, join us for Day trading education.
We normally have a Montreal Day trading course, a Calgary Day trading course, and a New Smyrna Beach Day trading course.
The S&P500 emini futures is one of the largest professionally day traded markets in the world. Our Day trading course focuses on training you on how to see price and direction in the marketplace (not just Facebook stock) and how to leverage your strengths to take a profit out of the market.
Disclaimer: day trading is high risk, do your own work : The efficacy of both technical analysis and fundamental analysis is disputed by efficient market hypothesis which states that stock market prices are essentially unpredictable. Be responsible for your trades, do your own work and never rely on others. When searching for a Day trading course, be sure you understand the risks involved in day trading and Facebook Stock.
Comments
No comment yet.